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Taxes? Do you pay your tax for Ebay?
 

How many of you file and pay taxes on your ebay income?

I don't report my income from ebay.

BooMer

Not yet I don't.

But when Paypal starts reporting income to the IRS in 2010 (or 2012 I cant remember) I will have to re-evaluate my selling practices.

So how do you go about getting the money from paypal? If you send it to your bank account thats the paper trail the IRS needs.

I claimed about half of what I made last year I claimed mostly the money I transfered to my bank.

The way I see it is why claim what was transferred to your bank, unless you make crap loads of money, for all the IRS knows you sent a money order to paypal and then proceeded to transfer.

Right now the issues of how the taxes will be calculated are still up in the air, I do not think the IRS has nailed this down yet. As far as the state goes, you should look up the rules for "Mail Orders" as to when you are supposed to collect sales tax.

Now as far as the Tax on the "profit", well there are a hundred different ways around this. For example: Did you sell some household items? Anything the your previously bought for personal use? If so well if you sold it for less than you originally bought it for, then it is a loss. If you are going to report the income that you make off of ebay make sure that you report all the expenses that are attributed to that sale as well as your time, etc.
This is also a good reason why you should create a business in the state that you live in. My advise would be to incorporate your business and not do it as a sole prop. as you will get personally nailed for any mistakes, Hide behind the corporate shield. So if anything goes wrong tax wise it is limited to the corporation.

Now before someone comes around about items and depreciation of value, well that is another part of the ball game but for most here that is something AFTER they protect themselves from the thieves at the IRS. Key thing to keep in mind is expense everything against the business so that you have no profit to pay taxes on. You will just pay the tax on the payroll (which I think is illegal and the the IRS has no right to take but that is for another day).

For example: I currently book all my expenses for my dogs (Food/Vet) against the company.. Why you ask, Simple they are my "Security Dogs" that watch over the inventory and the office.

Do you have any documentation to support that things will be happening on either dates?

A quick Google search found this:

Tax Report - WSJ.com

If u sell in high volume of over $1,000 a month of sales u must report your taxes.

I don't get it. The IRS merely has to watch bank accounts that get $10,000 or more in deposits a year.

Also, you should pay or taxes as if you don't you could end up not just with a fine, but going to jail.

Well now we have a general idea what to do about it. If anything

use your paypal debit card, money never goes through the bank.

myIonU, hmmm that explains why the IRS is after paypal.

You generally should try to avoid doing anything that gets you in jail for tax evasion. Getting a fine is one thing, but the IRS can send you to jail for years.

What difference will that make? Doesn't your bank report the deposits you're getting from paypal when you withdraw?

I reported mine because after all my true and make believe deductions I still qualify for income tax credit with all of my children so after filing I make out being paid about $3,000 from uncle sam. If you where going to have to pay money out of pocket to the IRS there are many ways to avoid it, you just need a good accountant.

I was reading this thread and wondering if anyone has a link to the paypal debit card thing to cash out the money ? I never filled taxes for my last year of sales and it went near over 30k. So I was wondering since all that was mostly withdraw, how could I get it going from now on in a better way ? Its PayPal canada.

I file my own taxes. I use Turbo Tax software. It's good to be self-employed.

BooMer